Myer Posts “Disappointing” $486 Million Full Year Loss
UPDATE– Shares in Myer have dived nearly 10% in morning trade to a two-month low of 39 cents, following its worst earnings result since listing on the ASX.
Department store giant, Myer, has post a notable $486 million full-year net loss, with Chairman Gary Hounsell describing the outcome “disappointing”. Considered its worst result since floating in 2014, the retailer has opt against a full-year dividend.For the year to July 28th, total sales slumped 3.2% to $3.1 billion, with comparable store sales slipping 2.7%.
Net profit [before restructuring and significant items] dived a whopping 52.2% to $32.5 million.
The lacklustre results – which were flagged earlier to investors – claim to have prompted the retail giant to shake up its leadership team.
Coupled with new CEO and former House of Fraser boss, John King, Myer has bolstered its merchandising and financial management team.
Second half sales slipped 2.6% to $1.38 billion, with like-for-like store sales dipping 2.4%.
By contrast, online sales have continued to grow, soaring 34.1% to $192.5 million – notching 7.7% of total sales.
During the year, the retailer made $30.8 million in sales from in-store staff on iPads.
Myer has also announced a new debt financing package, which will provide working capital tranches of $400 million. The retailer claims the deal provides sufficient liquidity and relaxed covenant conditions.
New conditions concern a fixed charges cover ratio of 1.4 times, coupled with a minimum shareholders’ equity of $400 million.
The fixed charges cover ratio covenant will jump to 1.45 times after six months, climbing to 1.5 times after 18 months.
Net debt for fiscal 2018 was down $6 million to $107 million.
The news follows the departure of former CEO, Richard Umbers, and its third profit downgrade this year.
Full-year earnings follow Myer’s $476.2 million half-year loss, coupled with $500.2 million in impairments.
In a statement released today, major shareholder Solomon Lew has further intensified his assault on the retailer’s leadership, calling for Mr Hounsell to step down “immediately.”
Former House of Fraser boss, John King, took the helm in June this year, embarking on a cost-cutting mission and strategic shift.
The retailer has slashed over 30 head office jobs, and terminated its multi-million dollar contract with ambassador Jennifer Hawkins.
Myer has also announced it’s launching a revamped website this month, complementing its new ‘Customer First’ plan.